What if the next generation of performance no longer came from growth, but from constraints?
As resources become scarcer, value chains grow more fragile, and regulations redefine the rules of the game, wealth management is entering a new era.
At Chloé in the Sky, this transformation calls for a clear response: rethinking asset allocation around essential assets, integrating constraints as drivers of resilience, and moving beyond purely prescriptive approaches. In this article, Éric Blain, Founding President of Chloé in the Sky, shares his team’s methodology, their carbon filters, and his vision of financial advice grounded in reality—demanding, strategic, and ready for the transitions ahead.
Your interpretation of the post-2025 world is based on a strong conviction: certain economic sectors will become critical, as they perform the economy’s vital functions in a context of scarcity. How does this “constraint-based” approach transform the allocation frameworks currently used by family offices?
The constraints-based approach calls for a return to fundamentals and common sense. This common sense is grounded in physical limits that will increasingly impose themselves on businesses in the future, as natural resources are not infinite. We seek to develop a pragmatic projection of the environment in which companies will operate, incorporating the opportunities and threats arising from geopolitical tensions and the multiple crises whose early signs we are already observing. The companies of tomorrow will have to contend with these realities. Those that can successfully integrate these constraints will be the strongest, the most resilient—the ones we call “anti-fragile.”
Applying these constraints today offers a time advantage, as this adaptation plays out over the long term. Often, this involves committing funds to R&D, to innovate and differentiate. This tactical effort will bear fruit in the future.
Defining a long-term strategy also allows for consistent management of asset allocations in a changing world. Short-term approaches, on the other hand, risk becoming increasingly fragile.
Admittedly, the trend is toward index funds. Many track indices such as the MSCI World or the Stoxx 600. But these indices do not accurately reflect the real economy: essential sectors, such as heavy industry, are significantly underrepresented in them.
Our vision is more deeply rooted: we believe that industry is indispensable for the success of future transitions. The constraints-based approach therefore enables wealth managers to develop high-value-added financial planning strategies for their clients.
You include high-emission companies as long as their decarbonization trajectory is credible. What criteria define this “carbon utility,” and how do you make it understandable for investors?
Essential industries, such as metallurgy and chemicals, are among the highest emitters of greenhouse gases. At Chloé in the Sky, this concept of essentiality is at the heart of our methodology.
Our second filter involves identifying, among these essential players, those capable of adapting to inevitable resource constraints. In our view, these are the companies that will come out on top in the future. Selecting them is a financially pragmatic way to anticipate a likely economic contraction.
What do they have in common? They are effective at managing their carbon footprint. Reducing their pressure on natural resources (metals, biomass, sand, water, hydrocarbons, etc.) amounts to reducing their emissions.
We analyze their carbon performance across four scopes:
Scope 1: the company’s direct emissions,
Scope 2: indirect emissions related to energy consumption,
Scope 3: indirect emissions across the entire value chain (suppliers, customers, end-of-life),
Scope 4 (less well-known but fundamental): avoided emissions, that is, a company’s positive contribution to reducing the emissions of its customers or users.
Mastering carbon challenges requires understanding and measuring all four of these scopes. This is what we do systematically at Chloé in the Sky.
We communicate transparently about the emissions of every company in our portfolio. Transparency and education are essential pillars for building trust with our wealth management partners, family offices, and their clients.
How do you support family offices that wish to move beyond a prescriptive ESG approach to build more resilient allocations aligned with the expectations of new generations?
A prescriptive approach is relevant when it is grounded in a concrete vision of the economy. Building standards on dogmas disconnected from concrete realities is risky. Currently, these standards are built on a stack of requirements that excludes vital industries and polluting companies that are nonetheless essential to the transitions supported by the taxonomy: this is an ethereal vision of sustainability criteria. The development of ESG standards by national or supranational bodies must be based on an impartial industrial vision.
Regulation is necessary. Admittedly, these are constraints for companies. But the goal is to get them used to taking a stance on issues that are better anticipated than endured. Civil society has largely understood this.
The risk for family offices and wealth management firms is that they will be left trailing behind public opinion. It is the risk of being unable to meet the growing demands of investors who seek quality, transparency, and consistency in their investments. The distribution network must bring itself up to speed on these complex topics, which their clients sometimes understand better than they do.
Education is becoming central because financial advisors must develop their skills and be able to address scientific topics. In the future, they will use new, more educational sales support tools, with a user-friendly interface tailored to this dialogue with their clients. Thus, their added value to investors will be fully justified. Current tools are insufficient, but we are working to change that quickly. Chloé in the Sky’s added value lies in helping its partners become capable of delivering ESG financial advice that goes beyond the strict regulatory framework.
